In the 21st century, economics, society, politics, education, and culture have changed. They are different from what we are accustomed to in the 20th century.
These changes have cost many businesses their fortune, and at the same time, have given birth to a number of new businesses. The way businesses operate has intensified, and is expected to evolve into a business war among dominant business groups in different regions of the world. Major business groups will consist of business groups from USA, Europe, Asia-Pacific, China, and Japan. In our local business environment, everywhere we find employees and executives from all levels in the state of shock to know that their businesses are unable to handle the change, unable to accept the truth that their business can no longer compete with multinational giants. Most are stuck in the limelight, the old glorious day, and coming up with easy words that “we still can compete”. Here are some advice from Peter Drucker: to make your business remains competitive, we have to change the way we look at management. Management is no longer just a management but a Business Management. Growth of the developed countries in this century will no longer be driven by the mere fulfilling of economics activities of business, but from the specialized business management of some activities that are differed in part or as a whole. The right organization structure is required regardless of the type of organizations: business, government unit, university, hospital, religious body, or military. All need the organization structure that fits the tasks. Relying on a single format of organization structure is destructive.
The New Management Paradigm explains that an interest and responsibility of business management involves in everything that affects the performance of the institution and the end performance itself. That everything can be internal and external, under the control or out of control of the institution. For our local business executives, throwing upon them are the challenges of business management of the 21st century. Our executive must therefore seek to master several new knowledge to handle the challenges.
First, executives must identify the core competencies of the organization; the area of expertise, the thing that the organization is good at. An ability to identify, maintain, and develop the core competencies further is a key to the business success. The writer has summarized eight elements of core competencies of business in Thailand. 1. Customer-oriented 2. Communications 3. Team Work 4. Leadership 5. Professional skills 6. Flexibility 7. Innovation and 8. Result-Oriented.
Second is the Leadership Competency Indicators. One way to tell the qualifications of business leader is to consider the core competencies of business and identify some elements or indicators out of them. General Electric, for example, has gone through that process and comes up with a set of requirements for its leader. 1. Vision 2. Customer/Quality-oriented 3. Honesty 4. Responsibility/Determination 5. Communications/Influence 6. Feeling of ownership/boundless organization 7. Team building/empowering 8. Knowledge/expertise/intelligence 9. Initiative/speed 10. A global frame of thinking. The competency of a leader is measurable from the 360-degree system.
Third is the Key Performance Indicators (KPIs). Also known as the Balanced Scorecard, it is a record of strategic success. For 4 years that I’ve been developing this KPIs and applied it as a tool to measure the success of business and as a link to move from strategy to the implementation. Moreover, KPIs is a benchmark to refer to whether the core competencies of business are developed from the basis of Performance Indicators. There are 4 key areas to measure (KRA: Key Result Area): 1) Financial aspect 2) Customer aspect 3) Operational aspect and 4) Learning and growth aspect. The performance that has been measured then leads to both individual and the business unit measurement.
Four is a business interest, especially an interest in human resources management that is based on Competency-based model. Known as the Broadbanding, the competency-based model plans a career path and succession planning according to the person’ competency. A business interest also shifts from “human resources development” to the development has changed. Courses are designed according to the master Knowledge Management plan. Learning can take many forms such as Action-based learning, Research-based learning, Cluster learning. Learner is evaluated by the competency-based model such as a portfolio of knowledge. This business interest is a result of an attempt to create a knowledge-based organization. The main objective is to create the most precise tool to manage the performance measurement and competency of an individual. The KPIs and the Competency-based model are combined to further develop human potential to the greatest interest of the organization.
These are the management challenges of the 21st century that have become a focal interest of business organization around the world. Business in Thailand are heading this way too.
Dr.Danai Thieanphut
Managing Director
DNT Consultants Co.,Ltd.
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